SAN FRANCISCO, Nov. 3, 2016 /PRNewswire/ -- RPX Corporation
(NASDAQ: RPXC), the leading provider of patent risk management and
discovery management solutions, today announced its financial
results for the third quarter ended September 30, 2016.
"We had a solid third quarter with strong cash flow," said
John Amster, CEO of RPX
Corporation. "Revenue in our patent risk and discovery
businesses was in line with expectations. We had an active
quarter of patent acquisitions, while carefully controlling our
operating costs. As we integrate the two businesses, we
continue to assess new opportunities to provide services
that can enhance the operational efficiency of corporate legal
departments."
Summary Results for the Third Quarter of 2016
Total revenue was $88.5 million,
compared to $68.2 million in the
third quarter of 2015.
- Subscription revenue from patent risk management services -
including insurance - was $62.4
million, compared to $68.2
million in the prior year period.
- Discovery services revenue was $18.0
million.
- Fee-related revenue was $8.1
million.
GAAP net income for the third quarter was $8.1 million or $0.16 per diluted share, compared to $7.8 million or $0.14 per diluted share in the third quarter of
2015.
Non-GAAP net income for the third quarter, which excludes
stock-based compensation, the amortization of acquired intangibles,
fair value adjustments on deferred payment obligations, gains on
extinguishment of deferred payment obligations, realized losses on
exchange of short-term investments, and their related tax effects,
was $12.7 million or $0.25 per diluted share, compared to $10.6 million or $0.19 per diluted share in the third quarter of
2015.
Non-GAAP Adjusted EBITDA less Net Patent Spend, the Company's
preferred measure of adjusted pre-tax free cash flow, was
$27.3 million in the third quarter of
2016.
RPX's patent risk management client network included 328
clients, including insurance clients, as of September 30,
2016.
Net patent acquisition spend during the quarter totaled
$34.8 million, and included 23 patent
transactions.
As of September 30, 2016, RPX had cash, cash equivalents
and short-term investments of $182.7
million.
Business Outlook
This outlook reflects the Company's current and preliminary view
and may be subject to change. Please see the paragraph
regarding "Forward-Looking Statements" at the end of this news
release.
The Company provided the following business outlook for the
fourth quarter of fiscal 2016:
Subscription and
Discovery revenue[1]
|
|
$81 - $85
million
|
Fee-related
revenue
|
|
$1 million
|
Total
revenue
|
|
$82 - $86
million
|
Operating income
(non-GAAP)
|
|
$12 - $15
million
|
Net income
(non-GAAP)
|
|
$7 - $10
million
|
Total adjusted
EBITDA (non-GAAP)
|
|
$51 - $55
million
|
Effective tax rate
(non-GAAP)
|
|
37%
|
Weighted-average
diluted shares outstanding
|
|
50 million
|
The Company provided the following business outlook for the full
year 2016:
Subscription
revenue[1]
|
|
$255 - $257
million
|
Discovery
revenue
|
|
$67 - $69
million
|
Fee-related
revenue
|
|
$11
million
|
Total
revenue
|
|
$333 - $337
million
|
Cost of revenue
(non-GAAP)
|
|
$194 - $196
million
|
SG&A
(non-GAAP)
|
|
$75 - $77
million
|
Operating income
(non-GAAP)
|
|
$61 - $64
million
|
Net income
(non-GAAP)
|
|
$37 - $40
million
|
|
|
|
RPX adjusted
EBITDA (non-GAAP)
|
|
$203 - $205
million
|
Discovery adjusted
EBITDA (non-GAAP)
|
|
$19 - $21
million
|
Total adjusted
EBITDA (non-GAAP)
|
|
$222 - $226
million
|
Net patent
spend
|
|
$115 - $120
million
|
Adjusted EBITDA
less net patent spend (non-GAAP)
|
|
$102 - $110
million
|
|
|
|
Effective tax rate
(non-GAAP)
|
|
37%
|
Weighted-average
diluted shares outstanding
|
|
51 million
|
The Company provided the following supplemental information
regarding amortization expense for the full year 2016:
Amortization of
patent assets acquired through December 31, 2015
|
|
$136.3
million
|
Amortization of
patent assets to be acquired during fiscal 2016
|
|
$21 - $23
million
|
Total amortization
of patent assets
|
|
$157 - $159
million
|
|
|
|
Amortization of
Inventus's acquired intangible assets[2]
|
|
$8 - $9
million
|
Other intangible
amortization expenses[2]
|
|
$1.3
million
|
|
|
|
|
|
|
|
|
[1]
|
Subscription revenue
is comprised of revenue generated from membership subscription
services, premiums earned, net of ceding commissions, from
insurance policies, and management fees related to its insurance
business.
|
[2]
|
RPX excludes
amortization expense related to intangible assets (other than
patents) acquired in conjunction with the acquisition of businesses
from its non-GAAP financial measures.
|
The above outlook is forward-looking. Actual results may
differ materially. The Company is not able, at this time, to
provide a forward-looking reconciliation to GAAP outlook for the
non-GAAP financial metric outlook it has provided above for the
fourth quarter and full year 2016 because of the difficulty of
estimating certain items that are excluded from the non-GAAP
financial metrics, including those items listed in "Use of Non-GAAP
Financial Information" below, the effect of which may be
significant. Please refer to the information under the caption "Use
of Non-GAAP Financial Information" below.
Conference Call
RPX management will host a conference call and live webcast for
analysts and investors at 2:00 p.m.
PDT/5:00 p.m. EDT on
November 3, 2016. Parties in the United States and Canada can access the call by dialing
1-800-768-6570, using conference code 5299868. International
parties can access the call by dialing 1-785-830-1942, using
conference code 5299868.
The conference call will be webcast and investors will be able
to access the webcast and slide presentation from the "Investor
Relations" section of the company's website at www.rpxcorp.com. A
replay of the webcast will be available online at the
aforementioned website following the conclusion of the conference
call.
About RPX
RPX Corporation (NASDAQ: RPXC) is the leading provider of
patent risk management and discovery management solutions. Since
its founding in 2008, RPX has introduced efficiency to the patent
market by providing a rational alternative to litigation. The
San Francisco-based company's pioneering approach combines
principal capital, deep patent expertise, and client contributions
to generate enhanced patent buying power. By acquiring patents and
patent rights, RPX helps to mitigate and manage patent risk for its
growing client network.
As of September 30, 2016, RPX had invested
over $2 billion to acquire more than 16,400 US and
international patent assets and rights on behalf of nearly 330
clients in eight key sectors: automotive, consumer electronics and
PCs, E-commerce and software, financial services, media content and
distribution, mobile communications and devices, networking, and
semiconductors.
RPX subsidiary Inventus is a leading international
discovery management provider focused on reducing the costs and
risks associated with the discovery process through the effective
use of technology solutions. Inventus has been providing
litigation support services to corporate legal departments, law
firms and government agencies since 1991.
Use of Non-GAAP Financial Information
This news release dated November 3, 2016 contains non-GAAP
financial measures. Tables are provided in this news release that
reconcile the historical non-GAAP financial measures to the most
directly comparable financial measures prepared in accordance with
Generally Accepted Accounting Principles (GAAP). These non-GAAP
financial measures include non-GAAP cost of revenue, non-GAAP
selling, general and administrative expenses, non-GAAP operating
income, non-GAAP other income (expense), net, non-GAAP net income,
non-GAAP adjusted EBITDA, non-GAAP net income per share, and
non-GAAP adjusted EBITDA less net patent spend.
To supplement the Company's condensed consolidated financial
statements presented on a GAAP basis, management believes that
these non-GAAP measures provide useful information about the
Company's core operating results and thus are appropriate to
enhance the overall understanding of the Company's past financial
performance and its prospects for the future. Management is
excluding from some or all of its its non-GAAP operating results
(1) stock-based compensation expenses (inclusive of related
employer payroll taxes), (2) the amortization of acquired
intangible assets (other than patents), (3) fair value adjustments
on deferred payment obligations, (4) gains on extinguishment of
deferred payment obligations, (5) realized losses on exchange of
short-term investments, and (6) their related tax effects.
Management uses these non-GAAP measures to evaluate the
Company's financial results and trends, allocate internal
resources, prepare and approve our annual budget, develop short-
and long-term operating plans, assess the health of our business
and determine company-wide incentive compensation. Management
believes these non-GAAP measures may prove useful to investors who
wish to consider the impact of certain items when comparing the
Company's financial performance with that of other
companies. The adjustments to the Company's GAAP results are
made with the intent of providing both management and investors a
more complete understanding of the Company's underlying operational
results, trends and performance.
There are limitations in using non-GAAP financial measures
because non-GAAP financial measures are not prepared in accordance
with GAAP and may be different from non-GAAP financial measures
used by other companies. The non-GAAP financial measures are
limited in value because they exclude certain items that may have a
material impact on our reported financial results. In addition,
they are subject to inherent limitations as they reflect the
exercise of judgment by management about which items are adjusted
to calculate our non-GAAP financial measures. Management
compensates for these limitations by analyzing current and future
results on a GAAP basis as well as a non-GAAP basis and also by
providing GAAP measures in our public disclosures.
The presentation of additional information should not be
considered in isolation or as a substitute for or superior to
financial results determined in accordance with GAAP. Investors are
encouraged to review the reconciliation of these non-GAAP measures
to their most directly comparable GAAP financial measure and not to
rely on any single financial measure to evaluate our business.
Forward-Looking Statements
This news release and its attachments contain forward-looking
statements within the meaning of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements include statements regarding the future
financial performance of RPX as well as any statements regarding
the Company's strategic and operational plans. The Company's actual
results may differ materially from those predicted or implied in
these forward-looking statements. Factors that may contribute to
such differences include, among others, the Company's ability to
maintain an adequate rate of growth, the success of the Company's
insurance and discovery management businesses as well as other new
initiatives, and the Company's ability to attract new clients and
retain existing clients. Forward-looking statements are often
identified by the use of words such as, but not limited to,
"anticipate," "believe," "can," "continue," "could," "estimate,"
"expect," "intend," "may," "plan," "project," "seek," "should,"
"target," "will," "would," and similar expressions or variations
intended to identify forward-looking statements. More information
about potential factors that could affect the Company's business
and financial results is included under the captions "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in the Company's most recent annual
report on Form 10-K and its quarterly reports on Form 10-Q on file
and available at the SEC's website at www.sec.gov. The Company does
not intend, and undertakes no duty, to update any forward-looking
statements to reflect future events or circumstances.
Contacts:
|
|
|
|
|
Investor
Relations
|
Media
Relations
|
|
JoAnn
Horne
|
Jen Costa
|
|
Market Street
Partners
|
RPX
Corporation
|
|
+1
415-445-3233
|
+1
415-852-3180
|
|
ir@rpxcorp.com
|
media@rpxcorp.com
|
RPX
Corporation
|
Condensed
Consolidated Statements of Operations
|
(in thousands,
except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenue
|
|
$
|
88,461
|
|
|
$
|
68,212
|
|
|
$
|
251,305
|
|
|
$
|
219,050
|
|
Cost of
revenue
|
|
50,830
|
|
|
37,639
|
|
|
147,566
|
|
|
109,383
|
|
Selling, general and
administrative expenses
|
|
23,615
|
|
|
18,773
|
|
|
76,414
|
|
|
57,229
|
|
Gain on sale of
patent assets, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(592)
|
|
Operating
income
|
|
14,016
|
|
|
11,800
|
|
|
27,325
|
|
|
53,030
|
|
Interest and other
income (expense), net:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
162
|
|
|
195
|
|
|
348
|
|
|
515
|
|
Interest
expense
|
|
(922)
|
|
|
—
|
|
|
(2,155)
|
|
|
—
|
|
Other income
(expense), net
|
|
(490)
|
|
|
681
|
|
|
813
|
|
|
1,416
|
|
Total interest and
other income (expense), net
|
|
(1,250)
|
|
|
876
|
|
|
(994)
|
|
|
1,931
|
|
Income before
provision for income taxes
|
|
12,766
|
|
|
12,676
|
|
|
26,331
|
|
|
54,961
|
|
Provision for income
taxes
|
|
4,651
|
|
|
4,842
|
|
|
9,829
|
|
|
21,066
|
|
Net income
|
|
$
|
8,115
|
|
|
$
|
7,834
|
|
|
$
|
16,502
|
|
|
$
|
33,895
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.16
|
|
|
$
|
0.14
|
|
|
$
|
0.32
|
|
|
$
|
0.62
|
|
Diluted
|
|
$
|
0.16
|
|
|
$
|
0.14
|
|
|
$
|
0.32
|
|
|
$
|
0.61
|
|
Weighted-average
shares used in computing net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
49,713
|
|
|
54,800
|
|
|
50,932
|
|
|
54,491
|
|
Diluted
|
|
50,247
|
|
|
55,703
|
|
|
51,462
|
|
|
55,547
|
|
RPX
Corporation
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
September 30,
2016
|
|
December 31,
2015
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
87,168
|
|
|
$
|
94,983
|
|
Short-term
investments
|
95,539
|
|
|
231,015
|
|
Restricted
cash
|
371
|
|
|
701
|
|
Accounts receivable,
net
|
34,326
|
|
|
13,905
|
|
Prepaid expenses and
other current assets
|
25,789
|
|
|
12,643
|
|
Total current
assets
|
243,193
|
|
|
353,247
|
|
Patent assets,
net
|
206,624
|
|
|
254,560
|
|
Property and
equipment, net
|
7,185
|
|
|
4,733
|
|
Intangible assets,
net
|
59,683
|
|
|
1,801
|
|
Goodwill
|
156,347
|
|
|
19,978
|
|
Restricted cash, less
current portion
|
965
|
|
|
727
|
|
Deferred tax
assets
|
30,594
|
|
|
16,619
|
|
Other
assets
|
8,865
|
|
|
6,896
|
|
Total
assets
|
$
|
713,456
|
|
|
$
|
658,561
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
2,172
|
|
|
$
|
959
|
|
Accrued
liabilities
|
13,553
|
|
|
14,842
|
|
Deferred
revenue
|
97,126
|
|
|
110,921
|
|
Deferred payment
obligations
|
—
|
|
|
2,383
|
|
Current portion of
long-term debt
|
5,849
|
|
|
—
|
|
Other current
liabilities
|
1,798
|
|
|
467
|
|
Total current
liabilities
|
120,498
|
|
|
129,572
|
|
Deferred revenue, less current
portion
|
5,565
|
|
|
4,731
|
|
Deferred tax
liabilities
|
4,412
|
|
|
—
|
|
Long-term
debt
|
89,885
|
|
|
—
|
|
Other
liabilities
|
8,613
|
|
|
7,779
|
|
Total
liabilities
|
228,973
|
|
|
142,082
|
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
5
|
|
|
5
|
|
Additional paid-in
capital
|
357,484
|
|
|
344,610
|
|
Retained
earnings
|
137,865
|
|
|
172,115
|
|
Accumulated other
comprehensive loss
|
(10,871)
|
|
|
(251)
|
|
Total stockholders'
equity
|
484,483
|
|
|
516,479
|
|
Total liabilities and
stockholders' equity
|
$
|
713,456
|
|
|
$
|
658,561
|
|
RPX
Corporation
|
Condensed
Consolidated Statements of Cash Flows
|
(in
thousands)
|
(unaudited)
|
|
|
|
Nine Months Ended
September 30,
|
|
2016
|
|
2015
|
Operating
activities
|
|
|
|
Net income
|
$
|
16,502
|
|
|
$
|
33,895
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
129,312
|
|
|
107,026
|
|
Stock-based
compensation
|
14,097
|
|
|
13,128
|
|
Excess tax benefit
from stock-based compensation
|
(90)
|
|
|
(1,404)
|
|
Gain on sale of
patent assets, net
|
—
|
|
|
(592)
|
|
Amortization of
premium on investments
|
1,564
|
|
|
4,838
|
|
Deferred
taxes
|
(5,975)
|
|
|
(376)
|
|
Unrealized foreign
currency loss
|
2,006
|
|
|
—
|
|
Fair value adjustment
on deferred payment obligations
|
(1,920)
|
|
|
(1,317)
|
|
Gain on
extinguishment of deferred payment obligation
|
(463)
|
|
|
—
|
|
Realized loss on
exchange of short-term investments
|
290
|
|
|
—
|
|
Other
|
902
|
|
|
—
|
|
Changes in assets and
liabilities, net of business acquired:
|
|
|
|
Accounts receivable,
net
|
(8,168)
|
|
|
14,117
|
|
Prepaid expenses and
other assets
|
(11,177)
|
|
|
(9,790)
|
|
Accounts
payable
|
(276)
|
|
|
718
|
|
Accrued and other
liabilities
|
(3,742)
|
|
|
(2,833)
|
|
Deferred
revenue
|
(13,063)
|
|
|
(18,878)
|
|
Net cash provided by
operating activities
|
119,799
|
|
|
138,532
|
|
Investing
activities
|
|
|
|
Purchases of
investments
|
(62,955)
|
|
|
(205,393)
|
|
Maturities of
investments
|
48,073
|
|
|
182,725
|
|
Sales of
investments
|
145,925
|
|
|
—
|
|
Business acquisition,
net of cash acquired
|
(228,453)
|
|
|
(425)
|
|
Decrease in
restricted cash
|
427
|
|
|
297
|
|
Purchases of property
and equipment
|
(3,004)
|
|
|
(1,617)
|
|
Acquisitions of
patent assets
|
(71,021)
|
|
|
(84,068)
|
|
Proceeds from sale of
patent assets
|
—
|
|
|
650
|
|
Acquisition of other
assets
|
—
|
|
|
(2,500)
|
|
Net cash used in
investing activities
|
(171,008)
|
|
|
(110,331)
|
|
Financing
activities
|
|
|
|
Repayment of
principal on deferred payment obligations
|
—
|
|
|
(935)
|
|
Proceeds from
deferred payment obligations
|
—
|
|
|
6,270
|
|
Proceeds from
issuance of term debt
|
100,000
|
|
|
—
|
|
Payments of debt
issuance costs
|
(2,003)
|
|
|
—
|
|
Repayment of
principal on term debt
|
(2,500)
|
|
|
—
|
|
Deferred acquisition
payment
|
(1,320)
|
|
|
—
|
|
Proceeds from
exercise of stock options
|
3,657
|
|
|
4,646
|
|
Taxes paid related to
net-share settlements of restricted stock units
|
(3,135)
|
|
|
(3,670)
|
|
Excess tax benefit
from stock-based compensation
|
90
|
|
|
1,404
|
|
Payments of capital
leases
|
(352)
|
|
|
—
|
|
Repurchase of common
stock
|
(50,752)
|
|
|
(9,367)
|
|
Net cash provided by
(used in) financing activities
|
43,685
|
|
|
(1,652)
|
|
Foreign-currency
effect on cash and cash equivalents
|
(291)
|
|
|
—
|
|
Net increase
(decrease) in cash and cash equivalents
|
(7,815)
|
|
|
26,549
|
|
Cash and cash
equivalents at beginning of period
|
94,983
|
|
|
78,019
|
|
Cash and cash
equivalents at end of period
|
$
|
87,168
|
|
|
$
|
104,568
|
|
RPX
Corporation
|
Reconciliation of
GAAP to Non-GAAP Net Income Per Share
|
(in thousands,
except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net income
|
|
$
|
8,115
|
|
|
$
|
7,834
|
|
|
$
|
16,502
|
|
|
$
|
33,895
|
|
Stock-based
compensation[1]
|
|
4,341
|
|
|
4,680
|
|
|
14,339
|
|
|
13,482
|
|
Amortization of
acquired intangible assets[2]
|
|
2,457
|
|
|
432
|
|
|
7,209
|
|
|
1,294
|
|
Fair value adjustment
on deferred payment obligations[3]
|
|
—
|
|
|
(612)
|
|
|
(1,920)
|
|
|
(1,317)
|
|
Gain on
extinguishment of deferred payment
obligations[3]
|
|
—
|
|
|
—
|
|
|
(463)
|
|
|
—
|
|
Realized loss on
exchange of short-term investments[3]
|
|
—
|
|
|
—
|
|
|
188
|
|
|
—
|
|
Income tax
adjustments[4]
|
|
(2,216)
|
|
|
(1,688)
|
|
|
(6,311)
|
|
|
(4,388)
|
|
Non-GAAP net
income
|
|
$
|
12,697
|
|
|
$
|
10,646
|
|
|
$
|
29,544
|
|
|
$
|
42,966
|
|
Non-GAAP net income
per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.26
|
|
|
$
|
0.19
|
|
|
$
|
0.58
|
|
|
$
|
0.79
|
|
Diluted
|
|
$
|
0.25
|
|
|
$
|
0.19
|
|
|
$
|
0.57
|
|
|
$
|
0.77
|
|
Weighted-average
shares used in computing non-GAAP net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
49,713
|
|
|
54,800
|
|
|
50,932
|
|
|
54,491
|
|
Diluted
|
|
50,247
|
|
|
55,703
|
|
|
51,462
|
|
|
55,547
|
|
RPX
Corporation
|
Reconciliation of
GAAP to Non-GAAP Cost of Revenue
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Cost of
revenue
|
|
$
|
50,830
|
|
|
$
|
37,639
|
|
|
$
|
147,566
|
|
|
$
|
109,383
|
|
Amortization of
acquired intangible assets[2]
|
|
(548)
|
|
|
(50)
|
|
|
(1,592)
|
|
|
(150)
|
|
Non-GAAP cost of
revenue
|
|
$
|
50,282
|
|
|
$
|
37,589
|
|
|
$
|
145,974
|
|
|
$
|
109,233
|
|
RPX
Corporation
|
Reconciliation of
GAAP to Non-GAAP Selling, General and Administrative
Expenses
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Selling, general and
administrative expenses
|
|
$
|
23,615
|
|
|
$
|
18,773
|
|
|
$
|
76,414
|
|
|
$
|
57,229
|
|
Stock-based
compensation[1]
|
|
(4,341)
|
|
|
(4,680)
|
|
|
(14,339)
|
|
|
(13,482)
|
|
Amortization of
acquired intangible assets[2]
|
|
(1,909)
|
|
|
(382)
|
|
|
(5,617)
|
|
|
(1,144)
|
|
Non-GAAP selling,
general and administrative expenses
|
|
$
|
17,365
|
|
|
$
|
13,711
|
|
|
$
|
56,458
|
|
|
$
|
42,603
|
|
RPX
Corporation
|
Reconciliation of
GAAP to Non-GAAP Interest and Other Income (Expense),
Net
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Interest and other
income (expense), net
|
|
$
|
(1,250)
|
|
|
$
|
876
|
|
|
$
|
(994)
|
|
|
$
|
1,931
|
|
Fair value adjustment
on deferred payment obligation[3]
|
|
—
|
|
|
(612)
|
|
|
(1,920)
|
|
|
(1,317)
|
|
Gain on
extinguishment of deferred payment
obligations[3]
|
|
—
|
|
|
—
|
|
|
(463)
|
|
|
—
|
|
Realized loss on
exchange of short-term investments[3]
|
|
—
|
|
|
—
|
|
|
188
|
|
|
—
|
|
Non-GAAP interest and
other income (expense), net
|
|
$
|
(1,250)
|
|
|
$
|
264
|
|
|
$
|
(3,189)
|
|
|
$
|
614
|
|
RPX
Corporation
|
Reconciliation of
Net Income to Non-GAAP Adjusted EBITDA Less Net Patent
Spend
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net income
|
$
|
8,115
|
|
|
$
|
7,834
|
|
|
$
|
16,502
|
|
|
$
|
33,895
|
|
Provision for income
taxes
|
4,651
|
|
|
4,842
|
|
|
9,829
|
|
|
21,066
|
|
Interest and other
(income) expense, net
|
1,250
|
|
|
(876)
|
|
|
994
|
|
|
(1,931)
|
|
Stock-based
compensation[1]
|
4,341
|
|
|
4,680
|
|
|
14,339
|
|
|
13,482
|
|
Depreciation and
amortization
|
43,725
|
|
|
37,038
|
|
|
129,312
|
|
|
107,026
|
|
Non-GAAP adjusted
EBITDA[5]
|
62,082
|
|
|
53,518
|
|
|
170,976
|
|
|
173,538
|
|
Net patent
spend
|
(34,800)
|
|
|
(36,176)
|
|
|
(71,934)
|
|
|
(110,312)
|
|
Non-GAAP adjusted
EBITDA less net patent spend
|
$
|
27,282
|
|
|
$
|
17,342
|
|
|
$
|
99,042
|
|
|
$
|
63,226
|
|
RPX
Corporation
|
Additional
Metrics
|
(in thousands,
except client data)
|
(unaudited)
|
|
|
|
|
|
As of and for the
Three
Months Ended September 30,
|
Operating
Metrics
|
|
2016
|
|
2015
|
Number of
clients[7]
|
|
328
|
|
|
245
|
|
Net
additions[7]
|
|
11
|
|
|
20
|
|
Gross patent
spend
|
|
$
|
98,380
|
|
|
$
|
36,416
|
|
Net patent
spend
|
|
$
|
34,800
|
|
|
$
|
36,176
|
|
|
|
|
|
|
|
|
As of and for the
Three
Months Ended September 30,
|
Financial
Metrics
|
|
2016
|
|
2015
|
Subscription
revenue[6]
|
|
$
|
62,414
|
|
|
$
|
68,177
|
|
Discovery
revenue
|
|
17,987
|
|
|
—
|
|
Fee-related
revenue
|
|
8,060
|
|
|
35
|
|
Total
revenue
|
|
$
|
88,461
|
|
|
$
|
68,212
|
|
Cash, cash
equivalents and short-term investments
|
|
$
|
182,707
|
|
|
$
|
368,021
|
|
Deferred revenue,
current and non-current
|
|
$
|
102,691
|
|
|
$
|
117,431
|
|
|
|
[1]
|
RPX excludes
stock-based compensation and related employer payroll taxes from
its non-GAAP financial measures.
|
[2]
|
RPX excludes
amortization expense related to intangible assets (other than
patents) acquired in conjunction with the acquisition of businesses
from its non-GAAP financial measures.
|
[3]
|
RPX excludes fair
value adjustments and gains on extinguishment related to its
deferred payment obligations and realized losses on exchanges of
short-term investments from its non-GAAP financial
measures.
|
[4]
|
Amount reflects
income taxes associated with the above noted non-GAAP
exclusions.
|
[5]
|
RPX calculates
non-GAAP adjusted EBITDA as GAAP earnings before other income or
expenses, net, taxes, depreciation, amortization, and stock-based
compensation expenses (inclusive of related employer payroll
taxes).
|
[6]
|
Subscription revenue
is comprised of revenue generated from membership subscription
services, premiums earned, net of ceding commissions, from
insurance policies, and management fees related to its insurance
business.
|
[7]
|
Represents clients
receiving RPX's patent risk management services only; does not
include RPX's discovery services clients.
|
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SOURCE RPX Corporation